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WORKING PAPER
SLOAN SCHOOL OF MANAGEMENT
WHICH ROAD TO OZ?
'NEW THINKING'
IN EAST GERMANY ABOUT THE WORLD ECONOMY
AND THE COURSE OF SOCIALISM
John
WP # 2045-88
E.
Parsons
July 1988
revised January 1989
MASSACHUSETTS
INSTITUTE OF TECHNOLOGY
50 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
V
WHICH ROAD TO OZ?
IN EAST GERMANY ABOUT THE WORLD ECONOMY
AND THE COURSE OF SOCIALISM
'NEW THINKING'
John
WP # 2045-88
E.
Parsons
July 1988
revised January 1989
Preliminary draft.
Comments welcome.
Please do not quote without permission.
Send all correspondence to:
Professor John E. Parsons
Department of Finance
MIT School of Management
50 Memorial Drive
Cambridge, MA 02139
WHICH ROAD TO OZ?
IN EAST GERMANY ABOUT THE WORLD ECONOMY
AND THE COURSE OF SOCIALISM
'NEW THINKING'
John
E.
Parsons
Second Draft: January 1989
Abstract
Economists in East Germany are helping to work out a new diplomacy for
the participation of their country in the institutions and regulatory
The impulse for this diplomacy is a
structure of the international economy.
'New Thinking' about the successes and failures of socialism during the past
A
forty years, especially as it regards international economic integration.
second impulse is a 'New Thinking' about the conditions of modern industrial
production on an international scale and the impossibility of the
essentially separate development of capitalist and socialist worlds. The
new diplomacy rests upon a radical revision in the ideology of revolution.
The weak element in this diplomacy is the relatively inadequate economic
understanding of the function and roles of various institutions for trade
and finance
The International Research and Exchanges Board in the US and the
Ministry of Higher Education funded my first three research trips to the
GDR.
MIT and the Humboldt University funded my most recent visit, and my
colleagues in the Department of Economics at the Humboldt University were
gracious hosts and supportive colleagues.
I am grateful to all those at the
Humboldt University, the University of Economics, the Academy of Sciences,
the Institute for Politics and Economy, the State Bank, and the Bank for
Foreign Trade whose stimulating and often very challenging engagements that
have contributed to this paper.
MIT
JUN
LVBRAmiS
}
l^b^
I
Which Road to Oz?
'New Thinking'
I.
in East Germany about the World Economy
and the Course of Socialism
Introduction
Developing within East Germany's ruling Socialist Unity Party (SED) is
a
radically new conception of how the perennial contest between socialism
and capitalism will be conducted in the arena of international economic
relations.
The 'New Thinking'
is spurred on by a fundamental reanalysis of
socialism's failures in the past.
It is a reanalysis,
however, conducted in
the context of a strong self -consciousness about socialism's successes.
Foremost among the failures that the 'New Thinking' confronts is the
inability of the socialist states to successfully develop an internationally
integrated socialist world economy.
Contrasted with that failure, in the
minds of the East Germans, are the accomplishments of the capitalist world
on the same terrain.
The West has succeeded in two important tasks that have frustrated the
socialist states: first, it has crafted institutions for trade regulation
and international monetary and capital flows that assure multilateralism in
trade; and second,
through the evolution of the multinational corporation,
the West has internationalized production and the division of labor.
sure,
To be
the SED remains conscious that these successes have been accomplished
within the logic of the capitalist system- -a logic that the Communists in
East Germany are not about to accept.
Nevertheless, the socialist
conununity's failure and the Western success represent two political
realities that the SED is acknowledging.
The 'New Thinking'
is also
being spurred on by
a
reanalysis of the
conditions of modern production and the internationalization of the world
economy and the new demands that these developments place on the forms of
international economic relations.
In place of the former vision of socialist and capitalist worlds
competition in the international arena a new vision is developing.
the contours of this new vision are not completely clear,
While
the writings and
discussions of many in the SED identify some principle features of the
discussion and locate the range of possibilities for its as yet undefined
aspects.
The key feature of the new vision is the deemphasis of the concept
of the independent development of a socialist world economy existing side-
by-side with the capitalist world economy.
Instead,
the concept of the
existence of a common world economy made up of both capitalist and socialist
states has emerged.
One consequence of this change is the demand that it
places on the socialist states for a new diplomacy regarding the
institutions and rules regulating international trade and finance.
According to this 'New Thinking,' for the socialist states to influence
the design of the institutions that regulate and give the essential
political character to this common world economy, they must first be a party
to them.
The socialist states must realistically assess the current balance
of power in the design and structuring of the institutions that will be
regulating this common world economy.
They must join these institutions on
the basis of their current organizational design, and must for a certain
period of time accept the capitalist principles or interests embodied by
these institutions.
However, a decision to gain influence by joining is only one half of
The old diplomacy emphasized the creation of an
the new diplomacy.
alternative set of institutions.
The 'New Thinking' embodies an optimistic
view of the possibility that key reforms can lead to qualitative changes in
the nature of these institutions.
'New Thinking'
It is precisely here, however,
is the most tentative and ill-defined:
been identified but no long term strategy yet exists.
to block the entrenchment of 'monopoly'
legal superstructure.
that the
an immediate goal has
The immediate goal is
power in the evolving international
An important feature of the current body of
international law and the international economic regulatory system,
according to the architects of this new diplomacy, is the special status of
the nation state.
International agreements are negotiated between nation
states and membership in international institutions is largely on the basis
of the nation state.
This is to be contrasted with, for example, a
regulatory system in which corporate entities would possess
comparable to that of nation states.
a
legal status
The new diplomacy has as its immediate
goal preserving and securing this feature of the international regulatory
system.
In this essay
pieces.
I
present the logic of this 'New Thinking' in three
Section II provides a brief summary of certain key assessments made
by the SED regarding the successes and failures of socialism as they impact
East Germany's perspective for future international economic relations.
Section III then presents the SED's reading of the new conditions that will
shape the economic contest at the international level.
section IV lays out the changes that this 'New Thinking'
overall strategy for the future.
Finally,
is
Before turning, however,
then,
bringing to the
to the logic of
the 'New Thinking'
itself, a few words are in order regarding the motivation
for studying the 'New Thinking'
in East Germany.
Much has already been written on the 'New Thinking' in the Soviet Union
and one wonders what is to be accomplished by examining the same process as
it occurs in East Germany.
There are two obstacles in the minds of many
persons that must be overcome.
The first is the presumption that there is
no new thinking going on in East Germany.
East Germany is, after all,
portrayed in the West as the most conservative of all the socialist states.
It is common wisdom among Western analysts that the East German communist
leadership displays at best an equivocal view of Gorbatchev's radical
revision of communist ideology and history and at worst a deep mistrust of
it.
Few Westerners suspect that East Germany is likely to be in the
forefront of the 'New Thinking'
in matters of economic relations.
The
second objection in the minds of many is that, even if this 'New Thinking'
does exist. East Germany is hardly an important player on the international
economic scene and so it is probably irrelevant to the decisive negotiations
between East and West on international economic relations.
Belying the common wisdom about East German conservatism, however, the
SED has been astonishingly active in its own diplomacy on security issues.
The agreements between the SED, the Czechoslovak Communist Party and the
Social Democratic Party of West Germany (SPDG) regarding a chemical weapons
free zone and a nuclear free corridor in central Europe are milestones in
diplomatic relations between ruling communist parties and a potentially
ruling party of a Western state.
Within the communist movement itself, the
SED has been an extremely prolific advocate of 'New Thinking' as regards
questions of war and peace.
The recently completed document on Conflicting
Ideologies and Common Security negotiated between organs of the SDPG and of
the SED extends the SED's bold activity beyond clear questions of war and
peace to other modes of conduct and cooperation with the West.
to the Western prejudice,
In contrast
the East German efforts appear to be entirely
consistant with Gorbachev's own program.
The SED has become in a sense the
Soviet Communist Party's junior partner in advancing the 'New Thinking' on
questions of security relations between East and West.
Among those Western analysts who acknowledge this new role for East
Germany in the arena of military security, the image of the SED leadership
as
'hardline' on other subjects remains firm.
schizophrenically
:
East Germany is described
as a radical advocate of the new Soviet diplomacy in the
military arena on the one hand, and as an extremely skeptical if not an
openly disparaging critic of the economic reforms on the other hand.
These
analysts have revised one -half of their image; they have retreated to half
prejudice, to half a stereotype.
If we do not look below the surface and
focus only on publicized events,
it is possible to maintain this peculiar
schizophrenic image of East Germany and the SED.
a
Unlike the arena of
military security, in the arena of international economic relations there
are as yet no diplomatic milestones to which one can easily point to
demonstrate the inadequacy of the old characterization.
East Germany has
not yet displayed the same aggressiveness here that they have in questions
of military security.
While the Soviet Union has passed legislation to
allow joint ventures on its territories, for example. East Germany stands by
its previous policies forbidding them.
While the Soviet Union recently
floated its first public bond offering in Western financial markets,
authorities at East Germany's foreign trade bank display no interest in
similar sales of their own.
And while the Soviet Union has given official
notice that it wishes to join the IMF and the GATT, East Germany is silent
on the question of its future participation.
Failing any such bold news
items on economic questions, Western analysts remain content to stand by
their old picture of East Germany in this regard.
However, as the saying goes, still waters run deep, and in East Germany
there is a strong current of 'New Thinking' on the subject of international
In the essay
economic relations.
I
will present the evidence for the 'New
Thinking' among economists and others in the SED.
The reader will have to
judge the extent to which this early stage of discussion does in fact
presage a qualitatively new diplomacy in the future.
The second obstacle can be addressed more directly.
While it is
certainly true that East Germany will never play a role comparable to that
of the Soviet Union,
Germany entirely.
it is nevertheless dangerous to therefore ignore East
East Germany has long been the most economically
successful of the socialist countries.
It has a powerful base of scientific
and technical personal, a skilled and educated workforce, and a proven
ability, relative to its socialist partners,
in industry.
to put technology into practice
It is still the Soviet Union's primary trade partner.
Just as
East Germany holds a strategic place in Europe and in the Warsaw Pact and
therefore its diplomacy in the arena of military security is of great
importance, so too does it hold a place of special importance in the arena
of socialist diplomacy on international economic relations.
that if the 'New Thinking'
the long run,
is
It seems clear
to have an impact on economic relations over
then the stance of East Germany on the matter will be an
important factor in determing the course.
We now turn our attention to the three parts of our story:
the SED's
developing view of "the Lessons of the Past," their perception of "the Shape
of the Present," and the development of "a New Vision in Place of the Old."
II.
A.
The Lessons of the Past
Four Decades of Socialism In East Germany: Planned Progress
While
I
will talk much in this paper about socialism's failures, it is
important to keep in mind that it has also had many tremendous successes and
that any new policy will be a consequence of an analysis of both the
failures and the successes.
Although there may exist in many socialist
countries persons who are revising their view of socialism out of a
fundamental disappointment with the historical experience of the past forty
years,
that is most certainly not the typical case in East Germany.
The
experience of East Germany with the construction of socialism, with economic
growth and social welfare, and with the management of the planning system
and the socialist enterprise is qualitatively better than the experience of
many other socialist countries.
For example, while in 1986 Mikhail
Gorbachev spoke of the 'years of stagnation' that had existed in the Soviet
Union,
SED General Secretary Erich Honecker had no such apologies to make in
his 1986 report to the SED's Eleventh Party Congress:
Looking back over the last five years, we can say with all due
modesty that despite all manner of disruptive manoeuvres on the part
of imperialism, the cause of socialism has made further progress in
East Germany.
While it has not yet reached a state of perfection,
we have made good headway.
Whenever the question is posed internationally as to what "real
socialism" means, we can proudly refer to what we have already
accomplished together. There can be no doubt that East Germany .. .has
achieved something that is held in high esteem by her friends and can
no longer be ignored by her enemies.
We have forged a new social
.
.
system.
While the Theses published by the Central Committee of the CPSU in
preparation for the 19th All-Union Party Conference held in June of 1988
spoke of the inadequate attention to social needs, of the failure to turn
quickly enough from an extensive form of growth, and of the mangled system
of finance, the SED could say that it had directly addressed each of these
issues more than a decade earlier and that in each area it had had
considerable success.
In 1986,
therefore, Erich Honecker reported that.
Our economic strategy has enabled us to turn the intensification of
production into the decisive platform upon which to raise performance
levels and ensure the sustained economic growth that is required.
...It is with some pride that we state that there are but few
countries in the world that have made comparably solid and dynamic
economic progress over such a long timespan and have been able to
constantly match this with improvements in the social sector.
There are many SED members who would have preferred a report in the
style of Gorbachev, one in which more of the real problems are addressed
explicitly and pointedly; but
I
think that most SED members would also agree
that the experiences of the Soviet Union in the last two decades are
qualitatively different than those in East Germany.
They would agree that
these differences should not be overlooked, and that these differences are
reflected in the difference between the reports of the two General
Secretaries, even if perhaps in an exaggerated fashion.
As one reads and
interprets the critical analyses and the new formulations that are beginning
to make their appearance in East Germany it is important to keep in mind
this fundamental satisfaction with key accomplishments of socialism and the
economic policies of the SED.
B.
COMECON and Socialist Integration: Lost Patience
In sharp contrast with the boastfullness that East German economists
display in discussing their own planning system and economic accomplishments
stands the frustration and contempt that they express as they turn their
attention to the COMECON and to the performance of their socialist partners.
A combination of a frank recognition of COMECON's inadequacies in achieving
socialist integration, a despairing attitude towards the economies of its
socialist partner's, and a lack of an independent vision of the details of
how a socialist international economy could be fashioned, has given the East
German diplomacy within the COMECON a peculiarly cynical and restrained
character
While published documents and speeches in East Germany do not plainly
and frankly admit the inadequacy of the integration process, one finds among
economists a willingness to discuss the issue openly.
for example,
A colleague of mine,
teaching foreign trade to future company managers and planners
at an East German university provides his students with the usual statistics
regarding the national products of the socialist states and their shares of
international trade.
Instead of then concluding with the official statement
that these figures illustrate the successes of COMECON in encouraging
integration, he laboriously points out how they illustrate the gap between
potential and reality, and in addition, how they illustrate the poor
comparison of the COMECON with the EEC integration.
One of the important tasks assigned to the COMECON in the late 1950
's
and early 1960's was the establishment of the financial institutions
necessary to encourage the integration of the socialist economies.
In the
1971 Program for Cooperation and the Development of Socialist Economic
Integration, the section on the COMECON financial institutions are
introduced with the assertion that.
The member countries of the COMECON are of the opinion that the
currency, financial, and credit systems must play a more active role
in the solution of the task of extending the development and
consolidation of the planned economic cooperation and the development
of socialist economic integration.
In contrast to the unpublished discussion of the inadequacies of the
integration process as a whole, the financial institutions' failure to give
impetus to the integration process are openly explained.
The primary
10
example is a complaint that the payments system remains bilateral despite
COMECON's 1964 decision to move to a multilateral accounting and trade
system and to the use of the transferable Ruble.
The two leading textbooks
on the subject of COMECON and international financial systems put the
problem as follows.
To date the major advantages of the multilateral clearing system
have not been fully utilized in practice. Research shows that the
payments at year's end between any two COMECON countries almost
exactly balance, and this because the participating countries plan
their mutual trade to balance.
While it is true that since its inception the transferable Ruble
has functioned as an instrument of multilateral clearing, and while it
is true that in the daily activities of the payment system it is used
in this fashion, nevertheless, at the end of each plan year the
payments between any two members of the COMECON balance themselves.
This demonstrates the contradiction between the multilateral
conception of the clearing system of the COMECON countries and the
persisting bilateralism of the mutual trade between them.
The frustration displayed by East German economists is less striking to
a
Western observer than the absence of new ideas for the resolution of the
problem.
East German economists recognize the fact that the strength of the
socialist community as a whole and of the East Germany economy in particular
depend in modern times upon the integration of the separate national
economies and upon an expansion of the international division of labor.
For
this reason that the textbooks on the subject deal honestly with the
institutional problems and failures.
economists'
Nevertheless, the East German
frustration with their partner countries and their own dogmatism
towards innovative forms of economic relations leads them to look with
extreme cynicism upon any institutional innovations to further integration
within COMECON on peculiarly 'socialist' principles.
They are equally
suspicious of institutional changes in the monetary and financial spheres
11
that would 'open'
the economies of the socialist states one to another,
because this would mean some loss of control on the part of East Germany.
The very same textbooks that openly admit the failure of COMECON's
multilateral monetary and financial structures immediately forewarn the
student reader away from the notion that such a failure could be corrected
by changes in these institutions.
The real problem, according to these
textbooks, lies in improving the quality of the separate planning and
management system in each country, and by this the East German authors mean
primarily the improvement of the systems in their partner countries:
The main cause [for the bilateral clearing] lies in the relatively
limited supply of goods and services on the socialist markets of
Because of this the COMECON countries strive to
COMECON countries.
assure themselves the delivery of and access to useful commodities
through the conclusion of bilateral plan-coordination agreements,
trade agreements, and annual agreements in which the supply of useful
commodities are tied to one another.
The extent to which the payments system clears on a multilateral or
a bilateral basis is not primarily a question of the transferable
Ruble, but rather is dependent primarily upon whether the material
basis is being developed commmonly within the COMECON countries.
This reluctance of East Germany to consider new socialist forms for
cooperation also displays itself in the diplomatic engagement over new forms
of cooperation to address the inadequate level of integration.
In the past
the COMECON has experimented with socialist joint ventures and other forms
of international 'ownership'
in the means of production.
The East German's
are very dissatisfied with the benefits that they have received from these:
and they are very suspicious, especially today,
that such cooperative
ventures on what they term 'so-called socialist principles' will be used by
their partners to take advantage of the strength of the East German economy.
They are especially concerned to preserve the benefits of their own
investment in and success with science and technology.
-
12
The most recent example of the consequences of this attitude is to be
seen in the negotiations within the COMECON countries over the subject of
'Direct Relations.'
This new concept has been introduced into the
discussion by the Soviets.
'Direct Relations' are supposed to be a new form
for the cooperative organization of production between firms in two
socialist countries.
This cooperation is supposed to be organized at the
level of the firm to circumvent the bureacracy.
in long-term integrated production,
Because it is cooperation
it must necessarily
bring with it a
mutual dependence and a short term constraint on the discretion of the
planning agency in each partner country.
Soviets present it.
It is,
This is the conception as the
in their view,
the only tool with which the low
Q
level of integration in production can be significantly increased.
At the 1985 meeting of the ministers of the COMECON countries 'Direct
Relations' were finally included as one of the immediate goals of the
organization.
East Germany agreed to this reluctantly.
For the next year
East Germany pursued a policy of giving to the term 'Direct Relations' an
entirely different meaning than that intended by the USSR.
the Central Committee of the SED,
The newspaper of
for example- Neues Deutschland - -carried
news of the successful establishment of 'Direct Relations.'
In each case
the content of the relations was limited to an exchange of experiences
between work teams at
a
factory in East Germany and a factory in the USSR,
or to discussions about how production could best be organized or how
specialization might proceed.
Truly integrative forms of decision making
and organization were simply not mentioned.
In a conference of COMECON specialists on the subject of cooperation in
production one member of the East German Academy of Science questioned
whether joint ventures were necessary for the use of the combined potential
13
of the COMECON countries:
the answer he gave to his ovm question was that no
institution outside of the structure of the distinct national economies was
even imaginable.
that
I
I
once commented to one of
ray
East German colleagues
had heard any suggestions from East German economists for new
institutional forms that should be created to extend the integration between
socialist countries.
When
I
asked him if they had any such conceptions of
their own, he answered that,
"We will join any project that is profitable.
If it isn't profitable,
then we do not want to be a part of it."
The
theoretical despair and lack of direction among East German economists on
this score is laid bare in the following comments of one in their ranks,
The improved connection of plan coordination with the increased use
of money-commodity-relations is a new task for which there does not
yet exist sufficient experience or theoretical understanding.
Written in 1972, this is still a good description of the disposition of many
East German economists.
C.
The Socialist Cominunity and the Developing World: the Failed Promise
East Germany is confronting the failure of the socialist vision in the
third world in much the same fashion as is the Soviet Union.
12
In the early
years of socialist development in East Germany great hope had been placed
upon the anti-colonial movement and the future strengths that political
victories there would be bringing to the socialist community.
victories did nothing but reinforce this hope.
And the early
But in recent years the
revolutionary hope that East Germany had placed in the developing world has
been transformed into cynicism.
It is a cynicism that grows out of
frustration with two phenomena.
First, East German economists have been confronted with the problems of
development in these countries themselves.
They have worked advising the
14
countries on economy-wide policies as well as identifying projects for
economic cooperation and trade that would be beneficial to both parties.
From their frustrations and failures has arisen a consolidated opinion that
the developing countries cannot,
at the current stage of development,
choose
a meaningfully socialist path and become dynamically growing economies that
will strengthen the socialist community.
One hears from East German
economists comments that the countries in the developing world that have
chosen the socialist path are economic basket cases.
East German economists
place great emphasis on the economic inequality and the initial
underdevelopment in these countries as an objective obstacle to economic
cooperation between these countries and East Germany.
is
Even when the despair
channeled through an ideology in which it is the imperialist system that
makes successful economic development on socialist lines impossible in these
countries, the result is a dashing of the older vision of new contributions
to the economic strength of the socialist community through the
revolutionary transformation of these countries.
The second source of frustration is with the developing world as a
whole,
inclusive of those that have chosen a 'capitalist-path'.
East German
economists have confronted the fact that these countries trade
overwhelmingly with the capitalist world, and that it will not be possible
to quickly wean them away from these connections.
There are a variety of
reasons for this, varying from the 'neo-colonialist'
institutions to the
superiority of the technology and products from the West.
In any case,
for
East Germany to sell its goods to these countries it must do so on the terms
of the capitalist world market,
and it therefore finds itself necessarily
embroiled in the laws of operation of that market.
In recent years East
German enterprises have found it difficult to sell their own products in the
15
developing world because of the large debt obligations of these countries.
As the indebted developing countries have moved to cut their imports to
maintain a balance of payments surplus to finance their debt repayments,
imports from socialist countries have been cut.
For the first time the
socialist community, and especially an exporter of industrial commodities
like East Germany,
finds itself directly and deeply affected by the events
of the capitalist world market.
This has had tremendous consequences for
the SED economist's consciousness regarding the problems of the developing
countries, regarding the relationship between the developing and the
socialist worlds, and regarding the relationship between the socialist and
the capitalist world markets.
It has therefore become clear to East Germany that the relationship
between the socialist community and the developing world will not be
advanced on the basis of the former politics of the socialist community:
The fact cannot be overlooked that the economic dependence of the
developing countries on the capitalist industrial countries continues
and that hardly any progress has been made in overcoming their
The weight of the socialist countries in their
economic backwardness.
economic relations does not correspond in any fashion to the economic
potential
D.
The Capitalist World: the Dogged Competitor
East German economists are also reexamining their past pronouncements
about the capabilities of capitalism to successfully develop and adapt to
the realities of the post-war years.
In this essay
I
am concerned with this
reexamination of one aspect of the capitalist world: the system of
internationalization in production.
East German economists recognize the
success of the capitalist world in creating two new institutions that have
allowed it to rapidly expand the international division of labor beyond what
:
16
would have been imaginable within the pre-war capitalist framework.
The
first of the two institutions is the system of multilateral trade and
financial agreements that facilitate international trade and capital flows,
and the second is the multinational corporation.
In the formerly reigning Marxist orthodoxy capitalism was a
fundamentally nationally organized form of productive relations: Lenin's
Imperialism focused attention on the special nature of its international
organization, but that international organization was almost exclusively
characterized by extreme national conflicts and antagonisms.
In this
orthodoxy the capitalist classes remained essentially national in structure.
This would lead to a crisis as economic development demanded an increasing
degree of internationalization.
The capitalist system would be incapable of
developing the institutions to accomodate the expansion of production on an
international scale.
Abandoning this orthodoxy, East German economists have recognized that
the post-war years have brought into existence a number of institutions that
have created an international market organized on capitalist principles.
The complex of agreements and regulations that have created a multilateral
trading system in the capitalist world are still developing and are the
subject of intense conflict.
Nevertheless, they have allowed the West to
take advantage of the international division of labor, and especially of its
application to new technologies.
They have helped the West to grow and
expand on an international basis previously unimagined by socialist
economists
The international balance-of-power is more to the advantage of the
capitalist states in the economic field than in any other area of
international relations.
The overwhelmingly larger portion of
production, world trade, and currency relations, and other sectors of
the world economy are essentially controlled by the leading capitalist
17
countries.
And in international organizations such as the IMF, the
World Bank, and the GATT the capitalist industrial countries possess
the deciding influence.
The second relevant institutional innovation of the capitalist world,
the multinational corporation, was previously vilified in East German
economic literature.
Its essence was said to be exploitation.
The only
institutionally innovative aspects that were acknowledged were those related
to its function as a tool of neo-colonialism.
The fact that the institution
was also uniquely suited to incorporating the objective social interest in
international production was never mentioned and not understood.
aspect of the institution that is now being given attention.
It is this
The
socialist countries are currently aware, as mentioned in a previous section,
that they need to develop institutions of their own that can accomplish the
key functions that the multinational corporations of the West serve, first
among those being the encouragement of the international organization of
production.
A new consensus is therefore slowly developing among East German
economists about the analysis of capitalism.
They are increasingly trying
to distance themselves from overly politicized judgements.
If in the past research into the functioning of the economic laws
of capitalism was targetted primarily upon identifying and
highlighting the limits of capitalism and the necessity for its
revolutionary transformation, so is it today an urgent necessity to
follow a binary methodological approach to the operation of the
economic laws of capitalism: to be researched are the conditions that
would make possible within the bounds of the objective laws of
capitalism a variant of state-monopoly-capitalism that is capable of
peace and oriented to at least partial solutions of other global
problems
There is a new demand to be 'scientific' and thorough in a description of
these institutions and the roles that they serve.
Communists have learned a
strong lesson from the conflict of early dogma with eventual reality.
One
.
.
repeatedly hears criticism against 'overpoliticizing' every issue that
arises in the capitalist world, and a demand for a more sophisticated
understanding of events there and of their role in spurring the evolution of
institutions.
"Not every crisis in capitalism is going to lead to an event
that threatens the stability of the system," was the cominent one of my
colleagues made in a speech at a recent conference.
East German economists are becoming realists in assessing the strength
of the socialist and capitalist institutions on the international arena.
And the recognition of their position vis-a-vis capitalism is a part of the
'New Thinking" about how the international contest will continue.
One
example is their new found willingness to honestly assess the obstacles to
East-West trade that originate in their own countries:
And the differentiated success of the individual COMECON countries
in mastering the socialist process of intensifed reproduction as well
as problems of the set of commodities for export were named as factors
which, not generally, but for the time being, limit the possibilities
for mutually beneficial economic relations [between East and West]
Products of a higher quality and meeting modern technological
standards, better servicing, as well as altogether more flexible
reactions to the demands of the international market, and a greater
readiness to provide information are all thing that are expected of
the socialist states.
...An important precondition for the active
participation of the COMECON members on the world-wide division of
labor is therefore a higher level of their supply of goods and
services
As a final note,
it is important to recall that in East Germany this
new realism cannot be equated with an enchantment with capitalism: the
capitalist system remains essentially unjust and crisis-prone in its
development:
At the same time, every limitation of the capitalist system must be
identified, the transcendence of which is not to be expected even
under changed conditions of existence and which bring forth the antimonopoly democratic movements and which demand in the historical
process a resolution in the direction of socialism.
19
The new realism is essentially a reaction against dogmatism, and not a call
for fundamental revision of socialist ideology on the limits of capitalism.
III. The Shape of the Present
In the previous section
I
discussed the recognition by the SED of the
successes and the failures of the past.
But the 'New Thinking'
is not
merely a reanalysis of the past and a decision to avoid those mistakes in
the future:
this would only be adequate if it was possible to start again at
the beginning.
The problem of comprehending new circumstances is also a
component of the 'New Thinking' in East Germany.
A. Military Confrontation and Economic Confrontation:
the New Hierarchy
It is by now common knowledge that in East Germany as in the Soviet
Union there exists a new conception of the role of war and the military in
the relationship between the two social systems.
Briefly stated, war can no
longer be 'the extension of politics by other means.'
That is, modern
weaponry has made war an anachronistic policy tool for both the capitalists
and the communists.
Within this 'New Thinking' the antagonism between the
two social systems retains its original place.
The SED remains firm by the
notion that the capitalist are prepared at any time to go over to open
confrontation when they see that they can gain an advantage from
it.
But a
war is no longer a conceivable element of that open confrontation.
What then are likely to be the premier elements of an open
confrontation, what will be the primary tools of this modern type of
'warfare?'
In the opinion of the SED the premier factor will be the control
over new scientific and technological developments and their application in
production.
In the logic of this
'New Thinking,'
the monopolization of
20
these weapons and their use is the weapon of modern warfare between the two
It is also the weapon of modern warfare between the
social systems.
capitalist states themselves as they vie to 'carve up'
modern form of inter- imperialist conflict.
the world in the
Economic strength- -and in
particular the control over science and technology and their application in
the economy- -takes the place of military power as the ultimate arbiter of
the relationship between socialism and capitalism and between capitalist
states themselves.
War between the imperialist powers as 'the time honored
redistributor of this room for expansion is in fact excluded today,
because it would put into question the existence of the capitalist
world system as a whole, yes and would mean its demise.
.This is
also apparently securely grounded as a political priority in the
consciousness of the leading circles of international finance capital.
And so a new mechanism is sought through which the inter imperialist
rivalry and contradictions can be resolved, within which the principle
of the division of and redivision of spheres of exploitations and
influence according to the principle of strength can be implemented
and at the same time the interest of all capitalists on the
preservation of the capitalist system and on the development of
mutually beneficial economic relations can be guaranteed.
...The
main emphasis of the rivalry then is concentrated clearly in the
economic sphere, in which once again, technology and scientifictechnological progress play a key role.
'
.
.
The consequences of this conclusion for economic policy are many.
The
most obvious is that the socialist states must maintain an independent
strength in the area of economy, science, and technology.
This reinforces
the older policy of organizing COMECON as a political organization for the
economic defense of the socialist community as a whole, but it is not the
only consequence to which one should give attention.
A more subtle element of the problem involves the diplomatic and
economic relations that socialist countries maintain with the rest of the
world.
The East Germans do not believe that it is possible to master the
modern technology and to maintain economic independence through economic
21
isolation or separation of the socialist community from the world economy.
The key question is, on what basis can the socialist community build the
international relations that will allow it to maintain a freedom of maneuver
or a strength against the capitalist states?
The answer that is developing
is that these international economic relations must be organized on the
basis of the current capitalist rules, at least initially.
They must rest
less than ever upon the revolutionary creation of new socialist states one
by one throughout the world.
This will be addressed more fully in the
section IV.
B.
Internationalization of Production and the Forging of a Common Polity
Much has been written in both the East and the West about the
increasing internationalization of the economy.
This process has especially
radical consequences for a Marxist theory of international relations; and
East German communists are beginning to discuss these consequences.
One
conclusion being drawn by East German policy makers is the notion of a
gradual development of a common political relationship between the peoples
of different countries.
This pointedly raises the inadequacies of a
strategy of socialist construction in one country and raises the need for
political engagement of peoples across boundaries in a character and fashion
that is currently unknown in East Germany.
The internationalization process that is occuring today in the arena of
production is, according to many policy makers in East Germany, drawing the
working people of many countries into qualitatively new and tight
relationships to one another.
Since the 1960's it is possible to identify above all the further
extension of the division of labor im besonderen and as a new element
a definite internationalization of the division of labor im einzelncn
22
as basic characteristics of the increased capitalist international
division of labor. The latter occured for the most part outside of
the bounds of the factory, outside of the bounds of the closed
production cycle and became a factor in the deepened socialization of
the division of labor in national and international dimension.
With
this development the socialization of production receives a new
quality, because the division of labor im einzelnen becomes --in so far
as it no longer constitutes a factory- internal division of labor but
rather a component of the social division of labor- -the basis of a
significantly increasing number of 'points of exchange' in social
.A continuation of this process on the international
production.
dimension during the last two decades means a new quality in the
international division of labor.
.
.
In Marxist political economy it is the relationships between people and
between the social classes of people as they are organized around production
that determines the political structures in which people are or can be
organized.
Political structures may have a certain independence from the
economic base, but as the relationships of people in production are
reorganized there arises a tension between the old political structures and
the new forms of productive relations.
The socialist states must engage in
the new political structures that follow from this tension.
According to the 'New Thinking,' the internationalization of production
has now advanced to such a stage that it places new demands on the
international character of socialist politics and diplomacy:
Above all, as a result of the transnational monopolies and the
related development of international production, international
productive relations are no longer, as they once were, derived,
secondary and tertiary relations, but rather have themselves become
primary relations, at least in the framework of the 'international
production' of the transnational monopolies.
The internationalization of the economy and of productive relations
resulting from the new technologies, according to Marxist theory, demand a
reorientation of the strategy for and forms of political organization.
First,
the internationalization makes impossible the sort of economic
23
declaration of independence that characterized Communist economic strategy
in the past:
^
In this regard one must take into account that economic security is
secured less than ever through withdrawal from the international
division of labor.
Second,
international productive relations demand political engagement
focused on the level of the international regulatory system.
The East Germans are increasingly aware that the capitalist class has
already begun to respond directly to the political demands of the
internationalization by organizing its own international institutions for
the debate and discussion of common policies:
In the activity of such international private monopoly bodies is
reflected a general requirement for monopoly capital in every country: the
necessity to continually discuss the situation, the discussion of possible
solutions, conception and strategies for the increasingly more complicated
and increasingly opaque worldwide economic problems, the direct personal
confrontation of interests, the search for their coordination, compromises,
etc.
For these purposes the leading circles of the international
monopolistic bourgoisie have developed various bodies with independent
significance for the formulation and implementation of their economic and
political interests...
Small steps in this direction have also been taken by the communist parties
in Western countries as they refocus some of their trade union organizing
into international cooperation,
and in special cases to refocus their
legislative work and political agitation towards international institutions
such as the EEC Parliament.
The SED is also revising its view of the
political contest between socialism and capitalism as a result of this fact.
Precisely how is the subject of the next section.
IV.
A New Vision in Place of the Old
The combination of a new assessment of the past, as discussed in
section II, and a fresh appreciation of the current conditions of
24
production, as discussed in section III, are bringing about a radical change
,
in the underlying vision maintained by communists everywhere of how the
world revolutionary process is to continue.
are the subject of this section.
the 'New Thinking'
The outlines of this new vision
Most Western writings on the subject of
recognize and report an analogous pattern: a reassessment
of the past, a new strategy for the future.
However,
these writers are
primarily concerned with pragmatic policies and diplomacy as they are guided
by perceived national interests interpreted narrowly.
A unique contribution
of this paper is its focus- -without apology- -on the 'New Thinking'
level of ideology.
at the
The history of the last forty years has created a crisis
for the internal logic of the communist theory of the world transition to
socialism.
This crisis as it is perceived within the SED is examined in
this paper, and its resolution- - in process--in the form of a new theory of
the transition is presented as well.
A.
The Old Vision: A New World Grows Alongside the Old
To appreciate what is new in the developing vision of how the contest
between socialism and capitalism will be conducted, it is important to
recall some of the key features of the communist vision for the world
revolutionary process as that vision existed for the last several decades.
For this paper the central feature of relevance is the focus of communist
revolutionary theory on the nation state as the locus for both the
revolutionary political change and for the subsequent transformation of
productive relations from capitalist to socialist in their essence.
Although the communists had long made international economic relations
central to their analyses of which country was ripe for revolution and of
25
what role various forces would play, etc., the locus of political engagement
and of economic transformation remained the nation state.
Lenin's thesis that socialism could be built in one country was an
important milestone in the development of this vision.
Lenin's theory of
a
long period of historical transition incorporated the concept of a socialist
world system developing parallel to the capitalist world system.
In this
vision, the transition to socialism would occur not primarily through the
revolutionary transformation of institutions affecting the entire world
capitalist system, but rather through the removal of a nation or territory
from this system and the qualitative transformation of the productive
relations and institutions within this nation.
Lenin placed great emphasis
upon the spatially uneven development of capitalism in the world.
came the notion of identifying the 'weak link'
From this
in the imperialist system.
The weak link was the country then ripest for political revolution.
A
revolutionary movement in that country would wrench it out of the
imperialist world system and deposit it into the socialist world system.
The economic relations within that country could then be gradually
transformed and given a socialist content.
The world revolution would
therefore be consolidated in a series of distinct revolutionary victories in
individual nation states.
One sees the pattern of this vision reflected in the language of East
German texts and articles on international economic relations.
The march of
the world revolutionary movement and the gradual worldwide transition from
capitalism to socialism is therefore typically described in spatial terms:
Through the breaking out of the Soviet state and through the other
countries that chose to go over to socialism as well as through the
formation of a socialist world system, the capitalist world system is
more and more territorially constrained.
26
The revolutionary transformation in a developing country was supposed to
focus upon the internal structure of production and upon its choice of
relations with the socialist countries:
The central question of the period of the economic collapse of the
colonial system, of unequal economic relations and of the dependence upon
the imperialist states is the transformation of the socio-economic relations
in the developing countries, above all the exclusion of foreign capital, the
development of the productive forces and of domestic economic branches as
well as self-sufficient foreign economic development.
Lenin's concept of peaceful coexistence is repeatedly described in a
similarly spatial metaphor: the necessary choice for a foreign policy given
the undeniable reality that two different social systems exist next to one
another.
B.
The New Vision: One World, Two Camps
In the 'New Thinking'
this long standing vision of the world
revolutionary process is significantly altered.
Contradictions and conflict
that arise on the international level and that can only be resolved by
political engagement at the international level now take more prominence in
Communist thinking.
9 ft
The significance of gaining political power at the
level of the nation state is not reduced, but the role that it takes in the
overall strategy is dramatically changed.
The capacity of the individual
nation state to revolutionize the productive relations among its population
is significantly downplayed,
especially in developing countries.
The
productive relations- -especially the international economic ties- -cannot be
unilaterally transformed, at least not as dramatically as was the case for
the Soviet Union,
the Eastern European states and China.
The revolutionary
state becomes instead primarily a political stronghold of the communist
27
movement.
Its influence is felt primarily at the level of the rivalry over
the form and content of the international regulatory system.
The world revolutionary transformation, proceeds therefore,
less in the
fashion of two parallel social systems- -one capitalist and one socialist-
with nations being pulled from the one and added to the other.
At the
current stage in history the transformation occurs, instead, in the context
of a slowly developing single international system of economic relations.
This single system is composed of nations with different internal social
orders and it reflects this composition in the contradictory content of the
international relations.
There exist two primary political camps, the
capitalist and the socialist.
Each nation or group of nations organized as
a political camp attempts to exert its
influence on the gradual development
of the social content of the single international system.
A revolution in a
nation brings it from one camp to the other, and the significance of this is
primarily in the ability of this state to add strength to the common effort
to transform or construct the rules for international conduct on a socialist
as opposed to a capitalist basis.
Key to the new strategy is the idea that the fate of any single nation
is tied to the fate of the
international community as a whole.
individual state will maintain its own sovereignty, of course.
Each
But that
sovereignty will be exercised in the context of a world that binds the
country through a myriad of ties to the many other countries of the world.
The nature of those ties and the constraints that they impose upon the state
itself are of as much relevance for determining the social life of the
nation as are its own internal structures.
The independent importance of international economic security
follows above all from the increasing double-sided economic dependence
28
and influence of the states- -also those of different social orders- -as
they have developed over the last two decades, more and more clearly.
.Under the influence of the increasing economic interdependence
between states a new quality of the dynamic relationship between
economy and politics in international relations characterizes the
times since the 60' s.
.
.
Therefore these international ties, the political constitution of other
states of the world and of the international institutions to which they must
be a party, etc., are of direct concern and relevance for the people of any
other nation.
to the
The economic ties that necessarily bind us all are, according
'New Thinking,
'
the foundation for a common polity.
...the objective necessity for the regulation of global problems
places unavoidable demands on the economic activities of both systems.
Whereas in previous times the task revolved around cooperation between
particular countries or groups of countries for the solution of
separate and limited economic issues, today a new situation has arisen
due to the global dimensions of the tasks.
Objectively today the
economic agents of both world systems influence the same worldwide
processes and they stand unter the pressure of necessity to implement
a commonly directed solution...
In the dialectic between productive forces and productive
relations, the productive relations in both world systems stand under
the pressure of productive forces with global influence.
The communists must therefore organize in recognition of this, and must
attempt to bring this consciousness of the common international political
destiny to the broader working class consciousness and make it an aspect of
the politics of this movement.
The subject of political rivalry is therefore the rules of behavior
that the world community considers acceptable in international relations.
For example,
the determination of prices for raw materials through
international commodity exchanges is a proper subject of common political
discussion.
The policies of an international banking institution are of
concern to people everywhere.
The environmental regulations accepted for
the use of the seas are the proper subject of common political discussion.
29
C.
Beginnings: The 'New International Economic Security System'
An early example of gropings in the new direction that
above can be seen in the statements of the socialist states,
I
have outlined
including East
Germany, on their recent diplomatic proposals for a New International
Economic Security System (NIESS).
a
The NIESS is a first attempt at combining
realism about the current balance of power in international economic
relations with a vision of the transformation of these relations from
capitalist to socialist relations.
In his report to the 27th Congress of
the CPSU, Mikhail Gorbachev first presented the Soviet concept of an
International Security System:
it included both a new approach to problems
of military security as well as the call for an economic component of the
international security system.
While the dramatic changes in Soviet
military policy have been well charted and discussed in the West, the
fundamental changes in Soviet international economic policy remain unclear
to Western analysts.
This is in part due to the fact that they have been
less at the center stage of actual negotiations, and as well to the fact
that they have been less carefully spelled out by the Soviets themselves.
The discussion here on the East German writings about an NIESS will provide
the reader with an outline of where the discussion on international economic
relations is currently heading.
Advocates of the 'New Thinking' recognize that for the socialist states
to influence the design of the
institutions for international trade and
economic relations they must have a program that acknowledges the interests
of the capitalist states and that is realistic for the capitalist oriented
developing world.
The NIESS as a concept accepts the continued existence of
capitalism, and it accepts it also at the level of international economic
relations.
This can best be seen in the efforts of the East Germans to
.
30
explain that the NIESS must have as its content something other than the
maximalist demands of the New International Economic Order precisely because
the NIESS must be a proposal that could be accepted by all nations,
including the capitalist ones:
...there is a close relationship between the concept of the NIESS and
the demands for the democraticization of international economic
relations, for the construction of a new international economic order.
At the same time, it must be acknowledged that the notion of a new
international economic order or of the democraticization of
international economic relations is in no way to be equated with the
construction of international security.
As a component of comprehensive international security it is
necessary that international economic security contribute to peaceful
coexistence as the premier principle of state-to-state relations.
They must therefore be founded upon the basic relationships and
balance of forces of current world economic development.
Based upon this relation one must put the question of the
independent goals and the possible partners for such a concept of
international economic security.
...Such a concept of international economic security would include
as partners the international monopolies (in industry, in banking, and
in the other branches of the economy) which are in part already
directly involved in political dialog. An international economic
security concept must offer the opportunity for the cooperation of all
those business circles that today control the deciding segments of the
capitalist economy.
.
The content of the NIESS must be a temporary compromise that modifies the
capitalist system even while it admits certain key features of that system.
And it would not be possible to include in the goals of an
international economic security system a just, economically founded
relationship between the price of raw materials, foodstuffs, and
industrial commodities nor the accomplishment of the other demands of
a democratic transformation.
In the position statement of the socialist countries to the UN
resolution on the subject of "International economic security" it was
underlined "that the concept of international economic security in no
way removes nor substitutes the demand in the UN- - including that in
the consensus- -accepted numerous useful decisions for the
transformation of the international economic relations and the
implementation of a new international economic order.
It is designed
to give to the discussion a new and additional impulse."
...It is
necessary to find in between solutions in the current discussion, that
are based upon the current social conditions.
31
What,
then,
is the
strategic objective that the socialist states have
set for themselves in making these concessions to capitalist interests and
logic?
The key objective of the NIESS is to establish the principal of
state participation in regulating the international economy.
The
international economic system is regulated primarily on the basis of
interstate agreements or by institutions that are organized as multi-state
institutions.
level.
By this very fact, politics is primary at the international
In the view of the East Germans,
the system therefore contains an
aspect of democracy that is missing within the territory of the industrial
capitalist states.
The power of the multinational corporations on the
international level is limited by and mediated through the national state
institutions and therefore all decisions and productive relations are
inherently and explicitly political in nature.
In the eyes of the East Germans, a key political objective of
capitalist politics is the establishment of the transnational corporation as
an entity with rights and stature comparable to the nation states for the
purposes of negotiating and operating these international regulatory
institutions
The kernal of the problem consists in the fact that the concept of
a 'transnational politic' is targetted towards demanding for the
monopolies the international legal status of sovereign states so that
they will be equally entitled with states and governments to operate
in international relations and able to make demands of them.
And
through their transnational character and their international field of
operation they would in fact be taking a privileged position.
The objective of the socialist states,
therefore, must be to check this
effort and to maintain the principle of an inter-state structure in the
organization of the single international economic regulatory system.
...the politics of the socialist states and the developing
countries for strengthening inter-state relations over fundamental
questions of international economic relations is an essential tool
32
with which to drive back the influence of the politically powerful
interests of international finance capital and with which to constrain
the effects of the spontaneous economic processes of international
state monopoly capitalism in the world economy.
An important conclusion of our analysis of international state
monopoly capitalism is that in international relations a stronger
orientation on interstate and international agreements with the
inclusion of the imperialist states is an essential moment in the
struggle with international state monopoly capitalism. Just the
strengthening of the 'state' character of international relations in
and of itself stands in the way of the extension of the influence of
international forms of state monopoly capitalism on the world economy.
Through the construction and extension of interstate forms of
relations in the international economy socialism, which is the extant
world economic alternative to capitalism, will be drawn into the
process and the historical tendency for planned organization of the
world economy on the basis of equal and mutually beneficial relations
will be advanced.
D.
The Mystical Capitalist Market: the Nagging Dogma
To influence the evolution of the international capitalist institutions
it is not enough,
however,
to simply be realistic:
one must also have a
distinct vision of what could constitute a workable set of international
economic regulatory institutions, a vision that is socialist in direction,
and a vision of how one can bring the system from the current set of
institutions to this socialist system.
This requires a new approach to the
process of transformation of capitalist relations into socialist relations:
a
sudden single moment of revolutionary upheaval the world over is not
likely.
This change in thinking about the possible forms of transition on
an international level from capitalist relations to socialist relations is
in its infancy in East Germany.
This vision of what would constitute a
meaningful reform of the capitalist ground rules in the international arena
is
the one key ingredient that is still missing from this diplomacy and from
this 'New Thinking.
'
Except for the importance of the state as the
33
institution that should be empowered to negotiate the ground rules and
regulations, the East Germans have no alternatives to offer.
While East German economists have begun to recognize that certain key
tools of financial and economic transactions are not in their essence
capitalist devices, they are not very far along in identifying the kernal
that is in a sense 'objective' and the shell that gives these devices their
capitalist essence in the current times.
33
They are therefore unable to
offer concrete suggestions for the proper institutions that should be
organized on an inter-state basis.
They do not have concrete proposals for
the resolution of any international economic problems that embody the
objective requirements of facilitating the expansion of international trade
and production.
As a consequence,
the initiative for the developing
regulation of the international arena will remain for a long period of time
with the capitalist states.
I
have discussed this process elsewhere in the context of East-West
industrial cooperation agreements, illustrating both the gradually
developing openness towards particular contractual forms as well as the
remaining ideological obstacles.
is the
34
Another good example of this conundrum
regulation of the international pricing of raw materials.
This is
identified by the East Germans as a key international problem and one
towards which both their NIESS and the developing countries' New
International Economic Order are targetted.
As the East Germans discuss
this problem it becomes clear that they remain wedded to a notion that there
exists a 'just' or 'economically founded' price, and that this 'economically
founded' price differs from the price that is set by capitalist principles
on world commodity markets.
35
The socialist states maintain that it is
possible to succeed to some degree on the international level in fighting
.
34
the inequality that they have long maintained is tied to the 'unjust' prices
of such commodities without at the same time completely eliminating the
capitalist system.
For example, on the issue of the rights of the
developing countries they assert that:
This is all the more so since today economic inequity does not
necessarily follow any longer from the operation of the internal laws
of the capitalist system and it is no longer a condition for the
existence of the international capitalist system.
And yet the East Germans do not have any basis of their own for establishing
what is the 'economically founded' price of raw materials; they are even
less prepared to explain how a consensus around this conclusion is to be
drawn.
It is precisely the inability to make such a determination and to
create such a consensus that has forced the COMECON states themselves to
retreat from their own efforts to define an 'economically founded' price for
raw materials and to accept for their own trade the prevailing Western
prices
The East German economists are behind their counterparts in developing
countries in this regard.
There have been many efforts over the past
decades, for example, to create international organizations to stabilize
international commodity prices.
There have been both successes and
failures, and in time many lessons have been drawn in this regard.
For the
East Germans the lessons are only negative ones: these efforts have been
failures.
And they have no recommendations for how to move forward.
The problem here is that there exists some radical 'New Thinking' at
the level of international politics, but that the same transformation has
not yet occured within the economics profession itself and with regard to
the tools of economists and the institutions of pricing and exchange
35
Here the old dogmas inherited from the Stalin era still prevail
contracts.
and handicap the 'New Thinking' as a whole.
Notes
1
SEP
2.
.
Report of the Central Committee of the SEP to the 11th Congress of the
Verlag Zeit im Bild, Presden, April 1986, p. 6.
Ibid.
pp.
24 & 25.
"Komplexprogramm fur die weitere Vertiefung und Vervollkomninung der
3.
Zussamenarbeit und Entwicklung der sozialistischen okonomischen Integration
der Mitgliedslaender des RGW," Kapitel II, Abschnitt 7, in Grunddokumente
des RGW Staatsverlag der PPR, Berlin 1978, p. 84.
.
Gerhard Brendel, Hans -Joachim Pubrowsky, and Kurt Schickram, Ware-GeldBeziehungen zwischen den RGW-Landern Verlag Pie Wirtschaft, Berlin, 1983,
4.
.
p.
5.
137.
Helmut Slewing, et al
1986, p.
.
,
Valutaokonomie
.
Verlag Pie Wirtschaft, Berlin,
73.
6.
BleEing, et al
.
7.
Brendal
.
,
et al
,
,
Valutaokonomie
.
pp.
73-4.
Ware-Beld Beziehungen
.
p.
138.
8.
"...one should frankly say that the available opportunities for greater
...we
cooperation and increased commodity exchange has been underused.
must pass on from what are primarily trading links to direct productive
interaction, thorough-going specialization and cooperation." From N.I.
Ryzhkov, Chairman of the USSR Council of Ministers, speech at the 42nd
session of the CMEA, November 3, 1986, as reported in Foreign Trade of the
USSR 1/1987, p. 4.
The "main forms [of the higher stage of the internationalization of
production among the socialist states] are: (a) joint enterprises... and (b)
direct cooperative relations among factories and firms through which the
work itself is internationalized. Cooperation at the level of production
must be developed on the basis of contracts with the objective that a part
that is produced in one country has no use value without the international
organization of production, that is, that the interests of one partner is
dependent upon the effectiveness of the cooperation in the functioning of
the whole production system."
From a summary of O.T. Bogomolow, et al..
The International Concentration of Socialist Production.
Issues of
Political Economy Moscow 1984, as appeared in Wirtschaf tswissenschaf
.
.
6/1986, pp.
934-8.
.
36
9.
The first public discussion of the fact that 'direct relations' require
an ability of the firms to bind themselves and therefore their planning
agencies to future production decisions or contingencies, and of the need
for this type of qualitatively new form of relation and commitment between
enterprises in socialist countries appeared recently in East Germany: H.
Andermann, E. Becker, G. Frohlich, and R. Weill, "Zur Entwicklung von
Direktbeziehungen zwischen Kombinaten der DDR und Wirtschaf tseinheiten der
RGW-Lander, insbesondere der UdSSR," Wirtschaf tswissenschaft 1/88, pp. 44-56,
.
"Konferenz Bericht:
10.
As reported in Andreas Gummich and Monika Kranz
Wissenschaf tlich- technischer-Fortschritt-ProduktionzusammenarbeitAusnutzung der internationaler Wertkategorien im RGW,"
Wirtschaf tswissenschaft 12/1986, p. 1838, regarding the comments of Dr.
Kraft of the Akademie der Wissenschaf ten der DDR.
,
.
Gertrud Grabig, "Die Rolle der Ware-Geld-Beziehung in Proze£ der
11.
sozialistische okonomische Integration," Deutsche AuHenpolitik 17.
Jahrgang, 1972, Sonderheft, p. 200.
.
Elizabeth Kridl Valkenier, "New Soviet Thinking about the Third World,
12.
World Policy Journal v. IV, n. 4, Fall 1987, pp. 651-674.
,
13.
Horst Heininger, "Okonomische Sicherheit, Weltwirtschaf t und
Weltfrieden.
Zu Grundfragen eines Konzepts internationaler okonomischer
Sicherheit," IPW Berichte 8/1987, p. 3.
.
14.
Heininger,
"Okonomische Sicherheit," pp. 2-3.
15.
Horst Heininger and Lutz Maier, Internationaler Kapitalismus Tendenzen
und Konflikte staatsmonopolistischer Internationalisierung Dietz Verlag,
Berlin, 1987, pp. 37, 56 & 66.
.
.
16.
Dieter Klein, Chancen fur einen friedensfahigen Kapitalismus
Verlag, Berlin, 1988, p. 11.
.
Dietz
17.
Gerhard Scharschmidt and Jurgen Nitz, "Intensiver Dialog zur Forderung
der Ost-West Wirtschaf tsbeziehungen, " IPW Berichte 4/1988, pp. 52-3.
.
18.
Klein, Chancen
19.
Heininger and Meier, Internationaler Kapitalismus
.
20.
Heininger and Maier, Internationaler Kapitalismus
.
p.
30.
21.
Heininger and Maier, Internationaler Kapitalismus
.
p.
133.
22.
Heininger,
23.
Heininger and Meier, Internationaler Kapitalismus
.
p.
77.
fiir
.
p.
11.
"Okonomische Sicherheit,"
p.
pp.
127-9.
6.
24.
Autorenkollektiv DDR-UdSSR, Internationale Wirtschaf tsbeziehunsen
Verlag Die Wirtschaft, Berlin, 1981, p. 51.
.
37
25.
Internationale Wlrtschaf tsbezlehunpen
26.
Heininger,
IPW Berichte
27.
Heininger,
"Okonomische Sicherheit,"
28.
Klein, Chancen fur
29.
.
p.
.
52.
p.
4.
[emphasis in the original].
p.
2,
Heininger,
"Okonomische Sicherheit," p.
5.
30.
Heininger,
"Okonomische Sicherheit," pp.
31.
Heininger and Meier, Internationaler Kapitalismus
.
p.
341.
32.
Heininger and Maier, Internationaler Kapitalismus
.
p.
343-4.
,
p. 200-1.
5
& 6.
This 'kernal' and 'shell' metaphor as it regards capitalist
institutions is borrowed from a recent discussion in East Germany where it
is used to describe not the capitalist institutions themselves, but the neoclassical economic theories of these institutions.
See especially Gerhard
Grote and Horst Huhn "Komparative Vorteile und ihre Ausnutzung im
34:1138AuEenhandel der sozialistischer Lander," Wirtschaf tswissenschaf
33.
,
.
1156,
1986.
34.
John Parsons, "Forms of GDR Economic Cooperation with the Non-Socialist
World," Comparative Economic Studies 29:7-18, 1987, and "Contractual Forms
for Industrial Cooperation: New Thinking in the East... and in the West?" in
Ronald Liebowitz, ed., Gorbachev's New Thinking: Prospects for Joint
Ventures, Ballinger Publ., Cambridge MA, 1988.
.
35.
See the comments of Heininger,
pages 29 and 30.
"Okonomische Sicherheit," as quoted on
36.
Klaus Kannapin, "Die Entwicklungslander und das Problem der
okonomischen Sicherheit," IPW Berichte 5/1988, p. 12.
.
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